According to sources, numerous companies in Myanmar, some of which have ties to the military regime, are interested in taking a stake in Telenor’s Burmese unit
Following the overthrow of the civilian government by a military junta in February this year, the Myanmar telecoms market has been plunged into chaos. By May, the highly volatile environment saw Telenor write off its $782 million Burmese unit entirely and, in July, the unit’s sale for around $105 million was agreed with Lebanese telecoms group M1.
However, it quickly became apparent that the new military regime was “very unlikely” to approve M1 owning the majority of the unit, with the junta signalling that it was uncomfortable with foreign ownership of such key national infrastructure. By October, the regime had extended “kind of a request not to leave the country” to Telenor Myanmar’s senior executives, saying that the military wanted to have “discussions physically” regarding the planned sale.
Now, with the sale having been stalled for many months, it now appears that companies linked to the military regime are lining up to create their own bid for Telenor Myanmar.
Companies that are now expressing interest include Amara Communications Co. Ltd., a subsidiary of the IGE Group, which is owned by Nay Aung, a brother of Admiral Moe Aung; and KT Group, whose owner, Jonathan Kyaw Thaung, has business relationships with Aung Pyae Sone, son of coup leader Min Aung Hlaing. Aung Pyae Sone himself is also notably a majority stake holder in Mytel, one of Burma’s national carriers.
According to anonymous sources speaking to The Irrawaddy, if M1 Group wants to continue with the acquisition, they could ultimately be forced to partner with a local company to get approval.
Interestingly, the source seemed sceptical that this desire to include a local company was the only factor in the junta’s decision to delay the acquisition process.
“I don’t think it [the sale] is taking so long just because of the desire to include a local company. [The regime] can first approve the sale to M1, and then allow a local company to take a stake later. I think that there might be other things going on that we don’t know about,” said the source.
What exactly these circumstances might be remains a mystery, but Telenor will surely hope that the situation is resolved sooner rather than later. The company is already facing pressure from campaigner groups, who claim that their sale to M1 Group – a company with a long history of working with oppressive regimes – was irresponsible and could lead to human rights violations.